The €3.01 per share price for the 224.5 million shares sold marked a narrow 2.9% discount to IAG's closing price Wednesday. IAG is the parent company of British Airways and Iberia, Spain's national airline.

The IAG sale comes as Spain is in the midst of overhauling its financial system, after seeking an emergency €41 billion loan from the European Union last year to rescue its tottering banks. The benefits the government sees in the divestment push are twofold: earning revenue to help pay back the EU loan, and forcing banks to slim down and focus on their core businesses.

In a research note, Espírito Santo Investment Bank said the sale was a positive for Bankia, the largest of Spain's problem banks, and could add 20 to 25 basis points to its core capital. As of March 31, Bankia had a core capital ratio of 10.06%, according to European Banking Authority methodology. The sale price was higher than the price of the IAG stake that Bankia carried on its books, resulting in a net capital gain of €167 million.

A Bankia branch in Madrid; the bank is divesting assets after a bailout.
Reuters

The sale may also be a positive for IAG. Diluting the 12.09% stake among many shareholders bolsters the liquidity of the stock and eliminates the possibility that the Bankia shares could fall into the hands of a potentially unfriendly acquirer.

"[The stock was] sold to a mix of long-only and hedge funds mainly from the U.K., some [from the] U.S. and a Swiss investor," said a banker involved with the share placement.

"I don't know whether [Bankia] tried to find a strategic buyer but I doubt it because it is only a minority stake," the banker said. "Deal was done at good price and quickly," the banker said. IAG is in the middle of a costly restructuring of the unprofitable Iberia. The group reported a €630 million after-tax loss in the first quarter to March 31, sharply wider from the year before, on a 0.5% rise in revenue to €3.94 billion.

Previously, Bankia has sold U.S.-based City National Bank of Florida to Chile's
Banco de Crédito e Inversiones
for $882.8 million. In addition, Bankia has sold properties and troubled loans.

Bankia is expected to undertake additional divestments over the next three years as a condition of the bailout. The bank and its parent company BFA hold stakes in electricity company
Iberdrola SA,
insurer
Mapfre SA,
olive oil producer
Deoleo SA,
hotel company
NH Hoteles SA
and technology provider
Indra Sistemas SA,
among others.